Why disputing a medical bill can help reduce costs

Consumers may feel that their medical bills are fixed, inflexible, set in stone. But that’s not always true: A new study shows that patients can often gain financial benefits by contesting seemingly erroneous charges or negotiating for financial help.

Of consumers who don’t reach out to question a medical bill, 86 percent said it’s because they don’t think it would make a difference. — but “the experiences of those who have made it provide evidence to the contrary,” according to a new study from the University of Southern California.

About 26 percent of people who called because they disagreed with a charge or couldn’t afford it had their medical bill corrected after the intervention, according to the study, published in August. About 15% received a price reduction, 8% received financial assistance and 7% saw their bills cancelled.

“Of the people who reached out, most of them had recourse through self-advocacy,” said report co-author Erin Duffy, a researcher at the USC Schaeffer Center for Health Policy and Economics.

Researchers surveyed 1,135 US adults between August 14 and October 14, 2023.

About 1 in 5 respondents reported receiving a medical bill they didn’t agree with or couldn’t afford in the past 12 months. About 62% of them contacted the billing office to resolve the issue.

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“If you can’t afford to pay something or (if a bill) doesn’t seem right or doesn’t match your care experience, you should call and ask questions about it,” Duffy said.

The savings can extend to hundreds or even thousands of dollars, depending on factors such as the patient’s health insurance and the type of medical visit or procedure, said Carolyn McClanahan, a physician and certified financial planner based in Jacksonville, Florida.

A 2023 review by the Consumer Financial Protection Bureau of medical bills for adults age 65 and older found that patients “face a complex billing system with a high likelihood of errors and inaccurate bills.” Inaccurate bills often result from erroneous insurance claims and are more common among consumers with multiple sources of insurance, the CFPB said.

Common errors included missing or invalid claims data, authorization and pre-certification issues, missing medical documents, incorrect billing codes and timely submission of claims, the report said. Such mistakes contributed to “the rejection of claims that would otherwise have been paid”, it said.

“(The bills) are going all over the place,” said McClanahan, founder of Life Planning Partners and a member of CNBC’s Advisory Board. “And there’s no transparency or rhyme or reason to how (providers) decide to charge.”

Doing nothing and avoiding paying your medical bills is probably not a good course of action: It could have negative financial consequences, such as late fees and interest, debt collection, lawsuits, garnishments and lower credit scores, according to a separate CFPB resources.

“If something seems glaring, question it,” McClanahan said.

Consumers should ask ahead of time how much a medical visit or procedure will cost, or ask what the estimated cost will be, she said.

Sometimes consumers will pay “much less” if they pay in cash rather than through insurance, McClanahan said. However, cutting a check could have other consequences, such as the amount not being counted toward the annual deductible, she added.

If you feel you’ve been overcharged, request an itemized bill from the provider or hospital and look for errors or duplicate charges, according to PatientRightsAdvocate.org. Research the fair market price for a service and use that information to negotiate, the nonprofit group said.

The phone number of your health care provider’s accounting or billing office will be on your billing statement, the CFPB said.

Here are three other questions to consider about your itemized bill, according to regulators:

• Do the charges reflect the services you received?
• If you have insurance, do the bills reflect what your insurance paid and what the provider understood it would cover?
• Do any of the charges indicate that a service was “out of network” when it wasn’t?

When you call a provider about a medical bill, keep a journal of the communication, McClanahan said. Write down the names of the people and what was discussed and get the commitment when you get answers.